In a surprise move a few minutes ago, the Prime Minister of the United Kingdom, Theresa May, announced her intention to hold an early General Election on 8th June this year. The next election had been scheduled to take place three years from now, in 2020.
The election may only be held if the British House of Commons passes a motion for the early election by a two-thirds majority. It will therefore require the support of many opposition MPs from the Labour Party, and possible also from the Liberal Democrats and Scottish Nationalist Parties. The motion cannot be passed without the support of at least some Labour MPs, whose party is polling at its worst level for 100 years. Prime Minister May is therefore challenging the Labour Party to live up to its rhetoric, and it is expected that the motion will be passed tomorrow. A total of 434 MPs must support the motion tomorrow, assuming all MPs vote. This means that 134 MPs from outside the Conservative Party will need to back the motion, including at the very least 13 Labour MPs.
Prime Minister May’s justification for the early election is the requirement for a stronger government to take Britain through the negotiated exit from the European Union. Although this should be taken with a pinch of salt, it contains an element of truth: her current government has a relatively small majority, which could make elements of the exit process difficult for her. If she wins the landslide victory that the polls are suggesting, her preferred exit strategy would be more likely to progress smoothly.
So far, the British Pound is largely unchanged against a basket of currencies, but can probably be expected to rise. It is already in a long-term upwards trend from the lows achieved after the announcement of “hard Brexit” some months ago.